How Trump's Trade War Is Making Canada Strong

Canada shows us how decisive leadership can get an entire nation out of a crisis, no matter how consequential.

- ANDREW J. MASIGAN

We've all heard about the fierce trade war waged by President Donald Trump against Canada, its closest trade, defense, and diplomatic ally. Many may not know that this is not the first trade war the US had lodged against its northern neighbor. The US had declared at least five trade wars against Canadian lumber and forestry products since the 1980s. Each time, Canada brought the US to court and won.

This time, Trump's trade war affects multiple Canadian industries. From steel and aluminum to auto and auto parts to agricultural products, among many others. The US is Canada's biggest export market, having sold some CAD$435 billion worth of goods last year. This represents 75.9 percent of exports.

If not addressed decisively, Trump's trade war could severely damage Canada's broader economy, with Canadian citizens inevitably bearing the brunt. A sharp drop in exports to the US could lead to a significant trade imbalance, potentially triggering a depreciation of the Canadian dollar, along with rising interest rates and inflation. Together, these could push the country into a full-blown recession.

Last March, Mark Carney assumed the prime ministership of Canada. PM Carney's credentials are widely recognized—not only is he a seasoned economist, he is also one of the most respected central bankers in the world. His track record demonstrates a proven ability to navigate complex challenges, guided by a clear vision and keen strategic planning.

The Prime Minister moved swiftly. His Cabinet was formed just two weeks after taking office. Within three weeks, his strategy to counter the trade war was finalized. A week later, an enabling legislation was introduced to the Parliament to support the rapid implementation of the strategy.